BOGOTA, Sept 25 (Reuters) - Colombia's central bank
increased its benchmark interest rate a quarter point on Friday
for the first time in a year, to stem inflation which picked up
as drought and persistent currency devaluation boosted prices
even as the economy slows.

In a unanimous decision the seven-member board decided to up
the lending rate to 4.75 percent, resuming a tightening cycle
and meeting the forecast of 13 of 23 analysts in a Reuters
survey.

There are increased risks that inflation is becoming
unhinged from the bank's target range of 2 percent to 4 percent
and market expectations, the bank said, as a devaluation of the
currency and drought from the El Nino weather phenomenon causes
price increases.

"The risk of a lasting rise in inflation and an un-anchoring
of inflation expectations has risen, while the risk of an
excessive slowdown in economic activity has not presented a
noticeable change," the statement said.